After Pandemic Success, Instacart Faces Struggle in Grocery Delivery Sector

Instacart, after being involved in the mass eCommerce drive of the pandemic, is considering how to move forward, The Wall Street Journal reported Tuesday (April 5).

This comes after the founders approached rivals like DoorDash and Uber Technologies about potential deals.

Those weren’t successful, and Instacart’s new CEO tried later – but still, no agreement was reached. And an IPO consideration also seemed to fizzle out.

There’s more competition now, with several retailers now using multiple delivery companies to handle online orders and negotiate better terms.

And other grocers are building their own networks – and some encouraging a return to in-person shopping, the most profitable option for the retailers as there are no delivery fees or product markups.

WSJ wrote that Instacart’s sales surged 330% from 2019 to 2020, per research firm 1010data Services. But things weren’t doing as well in 2021, slowing to 15% growth.

The sales have been slowing down for other pandemic-boosted businesses, including food delivery – though DoorDash has gained market share overall. Instacart’s share has diminished, falling to 30% from 40%.

To compete, Instacart has announced plans to cut delivery times to 30 minutes for major customers and mounted an advertising push, along with seeking deals with rivals.

Read more: Commerce Delivery No Sure Bet for Uber, and Platforms, Eyeing Amazon

PYMNTS wrote that there’s really nothing too sure in the commerce delivery world, with platforms all trying to one-up each other and expand services. This includes Uber, which has been trying to “out-Amazon” the eCommerce titan itself. Uber has been pushing into the logistics space since 2009.

Dara Khosorowshahi, CEO, said the idea would be like “a local Shopify,” where “we can help you power your local online commerce, and the Uber platform and the Uber audience is undeniable in the world.”